INDEX NO. 90 Civ.  -   (   )

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Plaintiffs,

against-

MICHAEL R. MILKEN, et al., Defendants.


USAT

  	171.   At the direction of the Milken Group, USAT purchased 
approximately $1.4 billion of Drexel-underwritten junk bonds. 
In-exchange, the Milken Group financed a number of business schemes for 
Charles Hurwitz, the primary owner of United Financial Group, Inc. 
("UFGÓ), USAT's parent.

	172.   In mid-1983, Hurwitz, through two companies he controlled, 
Federated Development Co. and MCO Holdings, Inc., acquired approximately 
23% of UFG. As of March 1985, the Milken Group had caused Drexel to 
acquire 7.2% of UFG's stock, and by March 1987, the Milken Group had 
caused Drexel to increase its ownership interest to 9.7%. Drexel and 
Hurwitz were the largest shareholders of UFG during the entire period in 
which junk bonds were purchased by USAT, together-controlling more than 
30% of UFG's outstanding stock from 1984 until 1988, when USAT failed.

	173.   Between 1985 and 1988, the Milken Group raised about $1.8 billion 
of financing for Hurwitz's takeover ventures. In return, Hurwitz caused 
USAT to purchase huge amounts of Drexel--underwritten junk-bonds. In 
1984, USAT purchased only $5 million of Drexel-underwritten junk bonds. 
Thereafter:

	¥In 1985, USAT purchased about $280 million of Drexel-  underwritten 
junk bonds;

	¥In 1986, USAT purchased approximately $688 million of 
Drexel-underwritten junk bonds;

 	¥In 1987, USAT purchased over $321 million of Drexel-underwritten junk 
bonds; and

 	¥In 1988, USAT purchased over $58 million of Drexel-underwritten junk 
bonds.

	174.   The Milken Group placed much of the debt Drexel underwrote for 
USAT with its network. For example, about $272 Million face amount of the 
$615 million of senior subordinated e@4 -Extendible notes (the "zero 
coupon notes") underwritten by Drexel to finance Hurwitz's takeover of 
the Pacific Lumber Company ("Pacific Lumber") in 1986 was purchased by 
First Executive and various of its subsidiaries, Columbia and GNOC 
Corporation:on ("GNOC"), a subsidiary of Golden Nugget, Inc. ("Golden 
Nugget"). Similarly, the Milken Group placed a significant . amount . of 
the senior subordinated extendible notes issued in connection with the 
Pacific Lumber takeover with S&Ls, including AMCOR, a wholly-owned 
subsidiary of Lincoln, Federal Savings & Loan, Hunter savings Association 
and Pima.

	175.   In exchange for these entities' purchase of the Pacific Lumber 
acquisition financing, the Milken Group and Hurwitz arranged for USAT to 
purchase other Drexel-underwritten junk bonds. 'For example, in return 
for GNOC's purchase of a significant amount of the zero coupon notes, 
USAT purchased Golden Nugget junk bonds underwritten by Drexel. In 
addition, National Can Corporation ("National -Can"), controlled by 
Nelson Peltz and Peter May, close Milken associates, purchased both the 
zero coupon notes and the extendible notes. USAT purchased 
Drexel-underwritten junk bonds issued by Triangle Industries 
("Triangle"), the vehicle used by Peltz and May to acquire National Can, 
and by Uniroyal Chemical, a company controlled by Triangle.